Patent summit participants at the edge of reason

Regulators and technology companies have held an international summit to explore problems with patent laws. Though the meeting was held behind closed doors, it doesn’t appear they agreed on much other than that something must be done.

The International Telecommunication Union, a United Nations agency, held the roundtable discussion in Geneva with more than 140 participants. These included regulatory bodies from the US, Europe and Asia, most major smartphone manufacturers, and experts on patent law.

The main topic of discussion was the “reasonable and non-discriminatory principle” (Rand), which is sometimes also referred to with “fair” at the start (Frand.) In many jurisdictions, the principle applies to any case where companies patent technologies that are part of the process of developing standards, such as those used to make sure different handsets can work over different types of cellphone network and call one another.

The idea is that because such standards development helps the entire industry, patent holder should be forced to license the technology to rivals but still make some cash from their work. The “non-discriminatory” part isn’t too much of a problem as it simply means letting anyone use it for a fixed royalty level but, as is common with legal disputes, the interpretation of “reasonable” varies widely.

It’s become a particular issue in recent months with scenarios such as company A refusing to license a patent, company B using it anyway, company A suing for infringement, and company B countering that it should have been allowed to license it in the first place.

Variations on that dispute include company A offering a license but company B thinking the requested royalty is unreasonable, and company A saying the relevant royalty rate should apply to the entire handset cost and company B saying the rate should only apply to the cost of the relevant component. (And yes, the first line of most Phonics Songs does often apply here.)

The ITU isn’t giving any detail about who said what at the debate other than that it was heated. It’s now planning to hold further meetings over the next year to discuss the topic, concentrating on the “reasonable” issue. One outcome could be an international standard that governs how such royalties should be calculated and gives either a specific royalty rate or a guideline range.

Florian Mueller of the FOSS Patents blog, who is consistently one of the most authoritative sources on the subject, says one of the most contentious points is whether patent holders should be allowed to get injunctions when they claim a violation of a “standards essential patent.”

He also notes that the ITU may be wary of trying to settle the issues while major regulatory investigations and court cases are ongoing. Mueller believes its much more likely court rulings will establish principles than that those involved will reach agreement through discussion.